Jubilation continues on Dalal Street in early noon deals

Indian equity indices extended their gains in early noon session and were hovering near the highest point of the day on continued buying by domestic institutional investors coupled with positive global cues. Sensex hit a record high of 36,572 level - surpassing its previous high of 36,444 recorded on January 29, 2018 in intra-day deals. Investors resorted to buying spree ahead of Index of Industrial Production (IIP) and inflation data to be released later today. Traders got some support with the International Labour Organization (ILO), an arm of the United Nations, report that if 40% of India’s electricity comes from renewables by 2030 (from 7.5% in February 2018), the country could add about 3 million new jobs. Meanwhile, Chief Economic Adviser Arvind Subramanian has said a three-tier structure under Goods and Services Tax (GST) is possible, ruling out a single-rate tax system.

On the global front, Asian markets were trading in green, on expectations that the US threats to expand tariff hikes is bluff and bluster and trade agreements will ultimately be reached. Back home, in scrip specific development, Larsen & Toubro’s (L&T) gained traction with its construction arm bagging orders worth Rs 2,388 crore. Alembic Pharma surged on receiving USFDA’s tentative approval for Ticagrelor Tablets.

The BSE Sensex is currently trading at 36590.19, up by 324.26 points or 0.89% after trading in a range of 36422.08 and 36597.20. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.94%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Energy up by 2.47%, Oil & Gas up by 1.88%, Metal up by 1.66%, Bankex up by 1.34% and PSU up by 1.31% while, IT down by 0.49% and TECK down by 0.47% were the only losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.78%, Yes Bank up by 2.67%, SBI up by 1.99%, Tata Steel up by 1.81% and Larsen & Toubro up by 1.75%. On the flip side, Infosys down by 1.46%, Mahindra & Mahindra down by 1.12%, ITC down by 0.60%, TCS down by 0.46% and Adani Ports & SEZ down by 0.44% were the top losers.

Meanwhile, ruling out a single rate Goods and Services Tax (GST), Chief Economic Adviser (CEA) Arvind Subramanian has said that a three-tier structure under new tax regime is possible as revenues stabilise. He also said that GST, India's biggest reform in indirect taxes still remains a work in progress and there is a need for further simplification of rates with fewer exemptions and simpler policies. He said “in India, we can never have one rate. I had recommended a standard rate and one for demerit good, one for low rate. 

Subramanian has stated that currently, the GST has four rates of 5 percent, 12 percent, 18 percent and 28 percent. Luxury and demerit goods are subject to cess on top of the highest slab. He said “I think over time we will see simplification. For example, once the revenue stabilises, 28 percent can (be rationalised), but the broader point I want to make is that why can’t we have three (tax slabs). That’s what we should ask for.” Besides, he added that since GST is a regressive tax, it won't be fair to have a single rate structure unless there are instruments to protect the poor who get hurt by rising costs.

He also said that GST implementation has not been too bad in the first year of difficult implementation. He said “my own view is the more you rely on carrot, and less you rely on sticks, you facilitate formalisation of economy. That’s what I like about GST. It is not heavy handed. Its a kind of self policing.”

The CNX Nifty is currently trading at 11049.70, up by 101.40 points or 0.93% after trading in a range of 10999.65 and 11051.15. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.19%, BPCL up by 3.68%, IOC up by 3.11%, Dr. Reddy’s Lab up by 2.89% and Yes Bank up by 2.83%. On the flip side, Bharti Infratel down by 1.95%, Mahindra & Mahindra down by 1.32%, Infosys down by 1.30%, UPL down by 0.90% and Zee Entertainment down by 0.73% were the top losers.

Asian markets were trading in green, Nikkei 225 soared 252.01 points or 1.14% to 22,184.22, Straits Times gained 8.63 points or 0.26% to 3,257.71, Hang Seng jumped 258.42 points or 0.90% to 28,570.11, Taiwan Weighted advanced 61.54 points or 0.57% to 10,738.38, KOSPI added 14.12 points or 0.62% to 2,294.74, Jakarta Composite strengthened 21.45 points or 0.36% to 5,914.81 and Shanghai Composite was up by 59.90 points or 2.08% to 2,836.67.